Sign In
Learn bits
Polity & Governance
Mahesh

24/08/22 05:05 AM IST

SC declares retrospective use of benami law unconstitutional

In News 
  • The Supreme Court declared “unconstitutional and manifestly arbitrary” amendments introduced in the benami law in 2016, which apply retrospectively and can send a person to prison for three years even as it empowers the Centre to confiscate “any property” subject to a benami transaction.
Historical background 
  • The 2016 law amended the original Benami Act of 1988, expanding it to 72 Sections from a mere nine. Amendments were opposed in SC and SC had to decide on three main issues:
  • Whether there is legislative intent to give retrospective effect to the 2016 Act
  • Whether the 2016 Act imposes a harsher penalty than the earlier Act insofar as it provides for “confiscation of Benami property rather than its acquisition”, thereby violating Article 20(1) Whether the 2016 Act is constitutionally valid.
Key Highlights of the Judgement 
  • Section 3(2): It mandates three years of imprisonment for those who had entered into Benami transactions between September 5, 1988, and October 25, 2016.
  • A person can be sent behind bars for a Benami transaction entered into 28 years before the Section even came into existence, thus it is a harsher punishment.
  • Section 5 of the 2016 Amendment Act: It said that “any property, which is the subject matter of Benami transaction, shall be liable to be confiscated by the Central Government”.
  • The court held that this provision cannot be applied retrospectively.
  • Government’s version of forfeiture and acquisition: The CJI dismissed the government’s version that forfeiture, acquisition and confiscation of property under the 2016 Act as it was not in the nature of prosecution and cannot be restricted under Article 20.
  • New class of fictitious and sham transactions: The court observed that the 2016 Act condemned not only transactions that were traditionally denominated as Benami but rather a “new class of fictitious and sham transactions”.
  • Prosecutions or confiscation proceedings quashed: Authorities concerned cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act, viz., October 25, 2016.
Source- The Hindu 

More Related Current Affairs View All

05 May

Key objectives of caste count

'The Union Cabinet has decided that the next Census will include questions on caste to its enumeration of India’s population, for the first time in almost a century. ' T

Read More

05 May

2 new genome-edited rice varieties

'Agriculture Minister Shivraj Singh Chouhan recently released two genome-edited varieties of rice, the first achievement of its kind in the country.' These two varieties, which

Read More

05 Mar

First-ever comprehensive survey of India’s river dolphins

'Prime Minister Narendra Modi released the results of the first-ever comprehensive population estimation of riverine dolphins – Gangetic and Indus dolphins – done in In

Read More

India’s First Ai-Driven Magazine Generator

Generate Your Custom Current Affairs Magazine using our AI in just 3 steps